On 17 September 2026, the State Tax Service issued guidance on the tax treatment of financial assistance provided by employers to employees for funeral expenses. Under the Tax Code, such assistance is generally taxable as employment income unless it qualifies for specific exemptions. The clarification outlines the conditions under which funeral assistance up to a certain threshold may be exempt from personal income tax (PIT) and military tax, provided it is paid in accordance with the collective agreement or internal labor regulations and does not exceed the statutory limit.
Key Takeaways
- Exemption Threshold: Funeral assistance up to UAH 10,000 per event is exempt from PIT and military tax if stipulated in a collective agreement.
- Documentation Requirements: Employers must retain the collective agreement provision, payment orders, and employee applications to substantiate the exemption.
- Excess Amounts Taxable: Any amount exceeding the threshold is subject to standard 18% PIT and 1.5% military tax withholding.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement